It’s that time of year when many Americans are anticipating their tax refund from the Internal Revenue Service (IRS). While a big payday is just around the corner, have you given much thought as to how you are going to spend that money? A1 Cash has some advice for you.
Our first bit of advice – don’t blow it! Seems easy enough, right? At A1 Cash we know just how tempting it can be to spend money on a shopping spree, a day at the spa, or maybe some nice new chrome pieces for your beloved motorcycle. But, resist the urge to waste the entire amount on frivolous purchases.
Treat your tax refund like you would any other unexpected bonus or monetary gift by following the one-third rule.
How does this work:
One-third to the past
Use one-third of your tax refund for paying towards debt. If you have debt that has been looming over you, now is your chance to make a significant impact on that debt. It will give you a sense of accomplishment as you see your balance plummet. Plus, you will save a significant amount of money in interest by paying down your balance early. Hopefully, you are able to pay off multiple debts with this one-third, but at least make a dent in your debts regardless.
One-third for the future
Financial experts agree, investing in yourself is top priority. This means that you need to be saving for retirement. Either contribute this one-third to your 401K account or in other promising investments.
One-third for the present
It is always nice to spend a little money on something you want, instead of always buying just what you need. Maybe you have wanted to do some home repairs or freshen up your walls with some new paint or décor. If shopping is more up your alley, treat yourself to something nice, within your budget of course! Whatever your desires may be, spend a little for yourself.
Do I really need a tax refund?
Have you ever wondered why you get such a large refund from Uncle Sam? Some people see it as an interest-free loan to the IRS. The IRS estimated the average tax refund in 2011 was about $2900, which equates to about $240 per month. Just think about it, you get that chunk of money once a year, but you could even out your tax contributions and end up with an extra couple of hundred dollars in your hands each month. It really comes down to what you prefer, a large refund or more money throughout the year.
You may want to consult the advice of a tax professional, and with whoever else contributes to your budget (spouse or significant other) and decide together how you should handle your tax withholdings for next year.
Cash Advances in Murfreesboro
At A1 Cash, we understand the difficulties people run into with their finances, which is why we offer multiple options to help relieve your stress about money. We are a locally owned and owner operated business serving the Middle Tennessee communities of Murfreesboro and Nashville. This is important, as you will get excellent customer service from us at every visit. For more information, please call us at (615) 895-6446.